Please exit Steam and go to the folder called C:\Program Files\Steam\ (this is the default location for a Steam installation - if you set a different installation directory, you will need to browse to it).

Delete all of the files in this folder except:

The \Steamapps\ folder and Steam.exe (this file is listed as an application and features the black and white Steam logo)

Restart your computer.

Then, launch Steam.exe from within the Steam installation folder, and not from a pre-existing shortcut.

No, none of those things worked for me, and in fact it ended up making steam forget I had validated this computer for use on steam, making me register it again, which I'm not real happy about.

But the end effect is the same problem - failed to initialize the engine.

Yeah...for me this things are also not working...
I also not abel to install net.framework 4 may this is the problem?
i only can play stronghold 3 when i deactivate the Intel graphic device but this is no solution...

This is nothing to do with the redistributable. The Failed to initialize engine message can be bypassed by disabling additional GPUs in device manager.

My system has 3 580s in tri-SLI and 1 460 for dedicated PhysX. The 460 occupied the MB’s first PCI slot so it is often detected as the systems primary GPU by hardware scanning software. When windows finishes booting the GPU drivers switch everything over to the 580s and all my games play perfectly fine. Except for SH3. By going into the device manager and disabling the 460 SH3 can be made to run. BUT if it is not re-enabled before the system is shut down the system cannot boot up again normally. So this is not an acceptable fix.

At any rate this shows that the issue is caused by having more than one GPU in a system, it probably manifests itself even when one is just a chip on the MB. But it dose not manifest either if all GPUs are the same or if they are running in SLI. Precisely which, I have not tested.

So this is a problem that needs patching. Not a simple work around from the community, sorry guys.

This is nothing to do with the redistributable. The Failed to initialize engine message can be bypassed by disabling additional GPUs in device manager.

My system has 3 580s in tri-SLI and 1 460 for dedicated PhysX. The 460 occupied the MB’s first PCI slot so it is often detected as the systems primary GPU by hardware scanning software. When windows finishes booting the GPU drivers switch everything over to the 580s and all my games play perfectly fine. Except for SH3. By going into the device manager and disabling the 460 SH3 can be made to run. BUT if it is not re-enabled before the system is shut down the system cannot boot up again normally. So this is not an acceptable fix.

At any rate this shows that the issue is caused by having more than one GPU in a system, it probably manifests itself even when one is just a chip on the MB. But it dose not manifest either if all GPUs are the same or if they are running in SLI. Precisely which, I have not tested.

So this is a problem that needs patching. Not a simple work around from the community, sorry guys.

I suspect you're on to something - my machine has two GPUs. But I can't disable either one of them. The device manager has one for an intel chipset (an integrated chipset) and one for an AMD GPU, a high performace 3D chipset. But if I disable the Intel GPU, then the AMD chips has no access to my screen (everything goes blank and I have to go to safe mode to fix). And if I disable the AMD 3D chipset, then the intel chipset doesn't support DirectX.

So, I have no workaround. I agree, this is something that needs to be fixed by the developers.